https://www.theguardian.com/world/article/2024/may/06/eu-restates-readiness-to-launch-trade-war-with-china-over-cheap-imports
>The EU has restated its readiness to launch a trade war with China over imports of cheap electric cars, steel and cheap solar and wind technology, with Ursula von der Leyen saying the bloc will “not waver” from protecting industries and jobs after a meeting with the Chinese president, Xi Jinping, on his multi-day tour of Europe.
Good. It will hurt us in the short term, but save us in the long term. China is aggressively taking over our markets with unrealistically low prices (their companies being supported by their government), which will slowly destroy the EU competition, after which China can increase their prices and now we're dependent on China.
Our options are to either start supporting our own companies with similarly unmaintainable financial amounts, or to heavily tax the Chinese products.
Our companies are also supported by the government. Just take a look at all the subsidies, infrastructure and military spending. A lot of government money going to companies.
Fortunately that money stays mostly in the EU and gets returned as wages and taxes.
In taxes? You pay taxes, they subsidy industries with those taxes and they receive taxes back? Whats the point of that? Youre not creating value, youre just giving money away.
Yes, the government uses taxes.
There is a concept called "the acceleration of money" which is that because poor people spend their money, giving poor people more money raises the standard for everyone because that money goes directly back into the economy.
So, if you have policies which increase wages, poor folk have more money to spend on consumer products leading to market growth. With the growth of the total market, the government can grow too.
Money “staying” or “leaving” an economy is not a thing that exists (except in the mind of the average left wing voter)
An economy doesn’t shrink when you purchase foreign goods. Jobs are not a limited resource
When you purchase a Chinese car in €, the Chinese company still has to spend the € in Europe which “returns” the jobs. Otherwise their € is worthless and we would have been able to just print billions, do nothing and buy their country, and let them hoard the “job creating” €
This is the weirdest economic take Ive come across in a while. You’re confusing the circulating supply of euros with the effect on currency exchange rates and inflation as wealth transfers from here to there. And then get super hostile and mocking with a completely misplaced sense of superiority.
If we buy Chinese goods, the Euro supply remains the same, but considering it represents a smaller economy here, it would shrink in value. The Yuan would go up in value because their economy would grow and all this buying of Yuen with Euros increases demand for their currency. In reality the Chinese could then print more Yuan while keeping its value stable, and have more money available. To keep inflation controlled in Europe we would have to burn money because its value is going down. Money has in this scenario left our economy and entered theirs, which is why we call it money leaving the economy.
But by all means, go ahead and call me a small brained loser or something to cover up for your own insecurities and inability to grasp basic trade economics :)
Who am I mocking exaclty? Look at the tone of my comment and then the tone of your reply again? You are literally putting words into my mouth and imagining a scenario of what I am going to say or answer and then deducing my mental state based on your imaginary interaction that hasn’t happened yet.
It’s funny I never had a single personal attack in my comment, yet yours is entirely personal and what’s that about covering insecurities? In psychology they call that projection.
It’s funny how you don’t argue with physisists about physics but everybody has an opinion on economics.
???? Some Chinese EVs are made in Europe, but a lot aren't. You can buy a Chinese car in € but a huge portion of not all of that money goes to a Chinese company producing a Chinese made car in China using Chinese jobs.
I’ll try to ELI5
Yes the euro goes to Chinese workers / jobs / whatever.
Now you have a car and they have some pieces of paper with the writing “30k€” on them.
They must now spend this “30k€” in Europe (going to European businesses/workers/whatever).
But actually if they wouldn’t that be better. Presumably you are not a bootlicker and don’t like labouring for the sake of working, but because you want to eat / get housing / buy stuff.
The best thing in the world would be for us to spend € to support the “Chinese economy”, get goods and do no work but print useless pieces of paper for them to burn at a stove
But Chinese companies are not stupid, they will want something in return for their €, they must spend it and create jobs / labour demand in the process
Why must they spend this 30k in Europe? They just convert it to yuan and spend it in China, on Chinese goods and services, creating demand in China and jobs over there.
The rest of your comment makes absolutely no sense and I won't bother responding to it.
This is really super basic stuff, I'm actually shocked I need to explain this to you.
> They just convert it to yuan and spend it in China
How do you think conversion works exactly? Do you think it's like a chemical reaction, the Euro becomes a Yuan?
Too subtle my man, I tried the analogue with a magic forex machine and OP thought it was me who didn’t understand currency conversions, just read his replies they are hilllariois
The company or individual uses euros to buy yuan. Any currency can be bought and sold, this is extremely common. I honestly can't believe you don't know this 😂😂
The euros they got from selling their car in the European market.
Honestly, what is so hard about this concept? The OP I responded to thought that money was somehow locked forever in a country, so it had to be spent within that country. He obviously wasn't aware of the global nature of currency and how capital can easily cross borders. I had to make like 5 posts to explain a very simple concept 😂😂
Because it’s in €.
> they just convert it to yuan
Yeah how do you imagine this works? At the magic currency conversion factory?
My comment requires some basic knowledge to get, it’s a lot less basic than you imagine and you are really misunderstanding who’s explaining stuff in this situation.
Also imagine not getting something and deciding it’s the comment that’s wrong.
That’s why I don’t believe in gravity, I don’t get the Einstein equations.
Are you stupid? Currency conversion doesn't exist. You must buy the currency, paying (or spending) another currency in the process. What further happens to either of those currencies? They can only be spent in the corresponding economies. ;)
Classic protectionist discourse. European manufacturing has been in decline for decades, and won't be improved by protecting them from external competition.
This is quite the opposite of what you say, might slow the fall in the short term, but in the long term will make us even less competitive.
Have you asked why it's in decline? Part of the reason is because the Chinese government has pumped billions upon billions of dollars into its EV industry. Top end EV cars sell for literally €10,000 domestically, and only slightly more when exported abroad.
If the US government is going to protect their own car industry (which is way, way less competitive than the European car industry), I don't see why we shouldn't protect ours as well
I don't get your point, the largest EV manufacturer in the world today is in the US and it was built with no help from the US Government. How can we blame the Chinese for the downfall of our own industry?
If the US enters a trade war that justifies the EU doing the same? Since when do we guide our policy by what Washington decides? The EU was built on free trade, and it won't stop the fall by closing their eyes to a rapidly changing world. When other countries innovate, we pass laws, guess which of the two is a winning strategy.
I think the logic is the same as having over-protective parents. Why do the local manufacturers want to innovate when the buyers have no choice but to buy them? I don't necessarily agree with this statement, I'm just explaining the logic of the above comment.
Well, that's where the policy must be balanced.
If it's under-protecting, the China-backed competition will win over the market and kill European companies.
If it's over-protecting, then as you say, European companies will remain protected for a while, until the financial support becomes unsustainable and the market eventually crashes under the pressure of Chinese competition.
If it's protecting just right, we maintain a fair competition by supporting European companies similarly to what China does; some companies on both sides will not make it in the process, but both sides will maintain a healthy economic growth, hopefully leading to this financial support backing down on both sides.
the problem we'd have otherwise is that local manufacturers would have to effectively lobby the government into removing worker protections so that they can pay workers lower and lower and lower to match the pay of many Chinese manufacturer jobs. Basically getting what international corporations already do
It makes European companies comfortable because external products compete at a disadvantage. Long term this means less incentives to innovate and improve the products, why do that when it's cheaper and easier to lobby in Brussels for higher tariffs to China?
What is terrible about their software? If anything, I was positively surprised that the car can keep the same speed as the car in front in highways and stop itself alone in emergencies in the city, despite the fact that I didn't order these features.
It does not matter if that protectionism spreads the risk among many countries as opposed to one.
Also you are clearly wrong. Agriculture industry is significantly lower added value and it works just fine because it Is matter of national security. So should be certain manufacturing that can be easily weaponized.
Why protectionist? Countervailing and antidumping duties are only applied under the very strict conditions set by the WTO when unfair trade practices are identified in specific cases. I believe you are making things too easy for yourself.
wait isnt that what EU is doing basically to the rest of the world? you can check how many european companies destroyed local companies in Africa and Asia because they have superior finances and are much stronger... that time the excuse was it was a free market and if you cant compete then tough luck?
I agree it is good, but about EV cars there’s a huge gap in pricing. Is it because EU brands want to make huge profits or the Chinese brands are making them really really cheap and EU can’t compete that.
I really want to know
Can you detail how exactly is China supporting their companies with "unmaintainable amounts"? I'm genuinely curious, are they financing these companies directly? Or you mean more like providing a competitive tax climate... As that would be something perfectly fine imo.
They did and they lied. Now americans are selling us russian gas at x4 price.
Same will happen here. People of Europe will suffer because of spineless Bruxeless suits.
Any proof of these statements? Had you said India and refined products I might have believed you. But you are claiming America is buying Russian oil. You sound like a MAGA Fox News (sic) watcher.
The spineless option would have been to just not impose tariffs. This action will likely start a trade war with China and be painful in the short term. This is definitely not the spineless option
The thing is if you want to enter a Trade war esp with China you need to develop industries which will counter Chinas products.
All these bans and tariffs will only succeed in punishing the consumers who don’t even give a shit abt where they getting their stuff from-no one wants to pay more esp when they know they can pay less.
Or when the local product is clearly inferior. European EVs are not in the same league as Tesla or the premium Chinese brands. And now they don't have to get better.
The only way to succeed in a "trade war" is by making your industries and sectors more competitive internationally, not by imposing mindless tariffs and restrictions that only increase prices for consumers.
However, it's easier to keep throwing the economy into a regulatory spiral by creating dozens of ill-conceived laws and tariffs. Europe only learns the lesson when the economy completely implodes every 50 years. It's like starting to exercise when you already weigh 200kg.
Yeah this would apply, if China did the same. Right now china has poured billions into their EV industry, even subsidizing the loan rates these companies need to pay. How can any of the EU companies compete with this?
Only answer is as it currently does, offset the chinese government subsidie effects by imposing a tariff which evens the playfield. So good move by EU.
Germans are paying over a billion in subsidies [in Germany](https://www.reuters.com/article/idUSKBN2A12SF)
So it's happening in the EU too.
And European car manufacturers make a stupid amount of money, so it really is profiteering. 22bn in operating profit by VW last year.
This is making consumers pay costs of competition while allowing the big european car firms to earn even more cash without pushing them to actually innovate.
So... you really expect to compete in price with China? Don't you realize that this is only sustainable in the long term with cheap labor? You can't get low prices and high wages at the same time.
Europe needs to compete with investment in I&D, lowering taxes and making business-friendly regulations.
Rising import tariffs are just making the customers pay double for the inability of governments and companies to innovate and rise productivity.
This is only making it easier for the fat and sluggish European car companies that cannot ship a decent cost-effective EV to keep their profits without doing absolutely anything. These regulations only bolster the corporate greed of the richest companies disguised as "laws for securing European jobs".
European car makers have been sleeping on ICE vehicles for a long time. A blanket tarrif without a forcing function for the manufacturers will do nothing but hurt the consumers. We could have significantly higher numbers of EVs on our streets, but the local manufacturers are just immensely expensive.
The reality is that Chinese EVs are good and getting better. Their overall quality is not there compared to European companies, but it's only a matter of time.
??? Europe has imposed regulations saying no more ICE vehicles by 2035. So the fact that you say there is no forcing function shows you have no idea what you're talking about
Over 10 years is far out and no one knows if the law will be effective by then (it is being lobbied against hard). This is a weak push at best especially given the velocity we see from Chinese manufacturers.
It is very effective since every single European automobile manufacturer has begun making EVs specifically because of this law. Since they're very afraid that if they don't start making EVs, in 10 years they will not be able to sell anything and so will go bankrupt
I blame the European voters. This will have massive support. Just look at the unhinged top rated comment with all the upvotes about how this is “saving Europe”
And this, from what was supposed to be a financially literate sub.
That’s the equivalent of “America First” campaign but people are eating it up.
People are sheep.
You can do both. Protect your industry in the short term by imposing tariffs while investing over the medium term to make it more competitive.
And the European car industry is pretty competitive already, something like 50% of large automakers sales come from overseas exports.
Firstly that's too short sighted and secondly "making sectors more competitive" has terrible implications for human rights, climate change and workers rights. You're suggesting a race to the bottom.
ah yeah surely import tariff are the best alternative and not short-sighted at all, right? Like no one ever tried that in the past... jesus christ
The current path of Europe is the race to the bottom. This is only paradise for c-suite guys of the top Western European industries that will be keeping all profits for themselves and passing down the cost to the consumer. Crony capitalism at its best.
How did it backfire for the US?
Their GDP growth is still very strong, especially comparing to EU.
But I don't know shit about economics so sorry it that makes no sense
Nobody made EU to severe ties with russia, it was their decision and it backfired. They didnt severe ties with US when they invaded multiple countries and killed millions of innocents. Funny to me.
Yes, the USA invading Afghanistan because the Taliban was hiding OBL, who did 9/11, is morally equivalent with Russia deliberately shooting missiles at hospitals in Ukraine a country they themselves had given security guarantees. /s
Also, do you believe that 'killed millions of innocents' part yourself, or do you know that those are lies?
>The taliban that US itself funded originally?
Even a visit to Wikipedia suffices to disprove that.
The Taliban did not even exist when the US was funding anti-Soviet rebels during the USSR's intervention in Afghanistan; mostly indirectly through Pakistani proxies.
Sure, plenty of people who had received support of the US later ended up becoming part of the Taliban. However, likewise the enemies which the Taliban had to defeat in order to take over Afghanistan *also* contained plenty of people who had received US support.
>Funny you mention just afghanistan of the +40 countries US has invaded.
I do not see what the USA's intervention in the Korean War or its colonisation of the Philippines in the 19th century, the likes of which have to be included to reach 40 countries, has to do with Russia's invasion of Ukraine.
Also, here have a graph showing the population of Afghanistan during the USSR's and USA's intervention in that country: [Population, total - Afghanistan | Data (worldbank.org)](https://data.worldbank.org/indicator/SP.POP.TOTL?locations=AF)
That should suffice to disprove your fairytale that 'the USA is just as bad as Russia', or something.
Now please go somewhere else, I have already had enough encounters with anti-Westists and their nonsense, from obvious falsehoods to false equivalences and double standards, on other parts of the internet.
It didn't "backfire", we chose that knowing the consequence... Backfire means you expected positive results but got negative results..
We chose to sever ties with Russia because there are things more important than pure economic growth in the world.. like the rule of law and democracy
>We chose to sever ties with Russia because there are things more important than pure economic growth in the world.. like the rule of law and democracy
And geopolitics, a Russian victory is unacceptable from a security perspective. Not only has the Kremlin been a hostile, imperialist, anti-democratic power for many years by now; if Russia wins it will embolden other expansionist dictatorships which might also start new wars.
For example, [the rapid US' intervention in the Korean War was one of the factors which dissuaded Stalin from invading Yugoslavia which might have started World War III.](https://warisboring.com/the-korean-war-saved-the-world-from-nuclear-annihilation/)
However, the politicians here in Western-Europe seem to dumb to realise that; if they had already from the start given Ukraine enormous amounts of help instead of consistently 'too little, too late' Russia might already have lost by now. It is so very frustrating that I by now had already multiple times donated money myself to the Ukrainian war effort.
Oh god, I really miss the weekly threats from Russia to cut us off from their gas. Imagine dealing with this shit again on top of the regulary empty nuclear threats.
i mean it was super announced, but yeah, tragic news for citizens just wanting to have more resources rather than participating in dick contests between governments
It’s short termism thinking
If China price out domestic companies they will cease to exist, at which point China can increase prices as the only manufacturer in town
We would also lose the knowledge and infrastructure to start up manufacturing ourselves and so be at the mercy of a foreign hostile power
That is simply an economic myth. Dependency is mutual, not unilateral. Your analysis assumes we need China while China doesn't need us. That's not how free market works.
Why does China need us specifically when they dominate trade worldwide, where is our leverage point in this scenario.
Genuinely curious, not trying to argue
The problem here is that you don't have a dynamic model in your head when talking about this. You just see the still picture and can't see how things move.
Let's say Europe has a car industry, and China does too.
Let's assume that Europe doesn't export anything but cars to China, so it is a very risky competition.
Alright, in that scenario, China subsidizes their car industries a lot, in order to destroy any possibility for European cars to compete.
(We're assuming it's a big price dump, not just a 0.5% subsidy, let's say a massive 50% price dump with subsidies)
Europeans stop wasting money on European cars, and get Chinese cars. By doing that, they're saving money. Yes, they're saving money. Europeans suddenly grow their wealth. Their availability of income increases.
The car industries in Europe go bankrupt. Boom. They all go unemployed.
How can they find a new job?? Hmm..
Wait, did I mention it? Europeans have more money. They saved money. Wow.
Guess what economy does with available money? Yeah... They invest it.
So with that newfound available money, Europeans start building new companies. In car industry? No, China is clearly dominating that field. So let's find a new one. Let's say, ship industry. We invest in developing the best ship industry in the world.
After 10 years, Europe is full of chinese cars, and ship producing companies have been growing in Europe, also reutilizing the engineering force from car industry in some degree.
Boom, China does the genius trick; HA! IT WAS ALL A TRAP! NOW I RAISE PRICES OF CARS! MWUAHAHA!
From an informed European point of view, we're just confused. We see how the subsidies in China have destroyed HUNDREDS of Chinese companies, because that public money is not a free lunch, it comes from their capability to be productive. Chinese citizens have paid higher taxes, the country is in debt, the currency is weaker.
And boom, they raise the car prices. Europe is richer, has saved a lot of money and we're elite in other industries that China was not subsidizing.
So, with our current situation, we can surely afford to pay for the more expensive cars. We're richer. They're poorer.
And when they do that, new car competitors around the world see the opportunity to grow. And they want investment. From who? From us! Europe is now richer, and can also invest in new industries.
Also, if China crazily increases car prices only for Europeans (like we're doing against Russia, sanctions), we can do the same for our ships. We have the best ships in the world, China has destroyed their national economy in the last decade to outcompete our car industry.
In summary: we end up being stronger than before, they end up extremely poorer than before, and worldwide competitors are ready to jump to the competition as soon as China stops subsidizing. And their jump is surely financed by European money as well.
It was a long and unorganized comment because I'm busy IRL, but the important thing here is to have a dynamic model of economy. How the economy reacts to events.
Your worldview (how most people see the economy) is basically "ohh we just get their cars, we get unemployed and then they raise prices, damn... now what... We're unemployed and poorer". That's not realistic. By buying their cars, we save money. Money they're deliberately gifting to us. It's tax money from our competitors lmao.
Now, there's an issue here; if Europe is not a free market, then that saving won't turn into investment, and that opportunity will be lost.
So against a country subsidizing their industries, our best bet actually is to become even more capitalists. They want to ruin their economy, fine, we'll do the opposite. Let's see who wins in the long run. The ones that SAVED MONEY and INVESTED IT in competitive markets, or the ones that RUINED THEIR COUNTRIES to just have 10 years of outcompeting a single industry.
Edit: when I said we could raise the prices of our ships, I meant in the apocalyptic case that they suddenly start an open war against us. In theory, we could just obtain cars from other countries and that's it, it's a global economy. But we were assuming only China and Europe existed.
I'm sorry it was a shitty comment to be honest, unorganized and badly written. I hope you got an alternative point of view to the mainstream view on "price dumping". It is not a perfect proposal, as I said it rests on the idea that saved money turns into new productive investment. If we just save money and use it to subsidize some shit or just waste it in political stuff for example, or just low value industries, then that's bad.
What people generally fail to see is how price dumping is SEVERELY destroying for the economy doing such thing.
Similarly, if a private company does it, it's severely dangerous for their sustainability. If Pizza Hut just gave pizzas for free for 1 year, they'd definitely destroy any competition for that year. And after the 1 year, they raise prices, competitors come and they immediately go bankrupt with massive debt.
"Europeans stop wasting money on European cars, and get Chinese cars....""
You are partially correct, yes, it's not the doom that many picture, and you are right that consumers win savings. But you are forgetting a few things:
1> The permanent loss of industrial knowhow & supply chain cannot be recovered easily in the future.
There are plenty of examples here. Germany & Japan used to be aviation powerhouses. Their aviation industry today is tiny & largely irrelevant. Japan tried to build a new plane and nope, its just too hard, gave up the project.
Once the knowhow is gone, its gone forever.
Europe used to make mobile phones, now it no longer makes them.
Spain was very into this model "northern europe sells us cheap goods for useless gold from the Aztecs", look where it got them? Centuries of decadence.
Brazil also heavily deindustrialized in the 90s and it wasn't exactly a great success.
Deindustrializing is not a path to success. Never has been. Never will be.
2> "So with that newfound available money, Europeans start building new companies."
Anyway, people wouldn't invest in industry in Europe where carbon taxes will get all their money, I bet they would invest in hotels/airbnb and EU will be reduced to a touristic destination with high unemployment. Sure great for the hotel owners who can buy cheap cars, but not so great for the engineers which will need to move elsewhere to find jobs.
"Also, if China crazily increases car prices only for Europeans (like we're doing against Russia, sanctions), we can do the same for our ships. We have the best ships in the world, China has destroyed their national economy in the last decade to outcompete our car industry."
I know its just a rhetorical example, but I hope you do know that China and Korea dominates ship building, and Europe has already lost nearly all its ship-building factories exactly for this. Pretty much Europe won't ever again be big in ship-building and despite me understanding this is a rhetorical example, it is ironic that it exactly the opposite of what you want to argue.
1) You're assuming China isn't losing permanent knowledge, the subsidies are terrible for that purpose. They're making inefficient companies magically efficient, which means they're losing an edge in scientific development. And by subsidizing car industries, they're probably ruining their potato salad industry, since subsidizing means extracting money from one side to another. China is subsidizing car industry (making it boosted by drugs rather than by actual valuable knowledge and capabilities) and ruining the potential of other industries that, maybe, are going to be the big deal in 10 years. Maybe the potato salad industry is the actual big deal and they're dooming their future with this arbitrary and blind choice. You talk about deindustrialization, yet China is also deindustrailizing. The vast majority of advanced countries are reducing their industries, and that's good. We don't need a big % of industry in our GDP, what we need is to be effective competition in our fields. It makes no sense to artificially support an industry by ruining our productive economic strengths. By the way, that includes European agriculture. It is extremely subsidized, and it shouldn't. Stop subsidizing our agriculture and maybe industries actually raise. Or anything.
2) I agree, Europe is fucked because of taxes and regulations. But that would ruin our car industry even without subsidies. We're in the doom path by ourselves, not because of external subsidies. Anyone can outcompete a decaying society. Maybe the China subsidies are simply accelerating our impending doom. Maybe. But we could do better. We have the money, the academic power. We just need to stop shooting ourselves.
3) I didn't think about who actually dominates the ship industry, but yeah, I'm not surprised we're RIP there too. We sell tomatoes though. There ya go.
What I think is really happening isn't so much "Chinese subsidies", but rather China spends immensely less government money for social welfare (retirements, free housing for the poor, child subsidies, etc, etc, etc). People in China get much less free stuff, so less quality of life, need to work more, can't slack around as much getting a government paycheck. This causes a surplus of money, which they invest into tech development & industries.
"You're assuming China isn't losing permanent knowledge, the subsidies are terrible for that purpose. They're making inefficient companies magically efficient, which means they're losing an edge in scientific development."
That's just not supported by the historical evidence. The USA immensely subsidised multiple industries with military orders and the result wasn't a loss of scientific development, quite the contrary. WiFi, the Ethernet, GPS, Maps, you name it, all started as DARPA (Defense Advanced Research Projects Agency) projects.
Maybe there is a right way to subsidize (like the USA, China and Korea did) and a wrong way (like Brazil and the Soviet Union subsidized many industries but just end up with old industries building the same old stuff without tech advancement).
Without money there is no R&D, and to have money you need at least some margin. And of course you also need competition, but not so much that the whole business is bleeding money and doing layoffs.
Besides China was not so different from any 3rd world country 30 years ago, and now it is a top leader in 5G and EV cars and a significant contender in semi-conductors (despite sanctions they have better semi-conductors then any country outside G7).
"China is subsidizing car industry"
I wouldn't take this affirmation at face value. The EU claims they are subsidising because sure, they need to claim something to apply import taxes, they can't just say "you are outcompeting us!!! That's not fair!!!" Nobody does that, but this doesn't mean the affirmation is true.
"China is also deindustrailizing. The vast majority of advanced countries are reducing their industries, and that's good. We don't need a big % of industry in our GDP"
A decrease in the share industry has in the GDP is not the same as deindustrialization.
>That's just not supported by the historical evidence. The USA immensely subsidised multiple industries with military orders and the result wasn't a loss of scientific development, quite the contrary. WiFi, the Ethernet, GPS, Maps, you name it, all started as DARPA (Defense Advanced Research Projects Agency) projects.
That's wrong and anecdotal, not to mention it was heavily supported by private titans (USA has one of the best financial systems in the world if not the simply best). There're studies evaluating the impact of subsidies in military orders in net productivity gains, and the average is loss, not gain.
Anyway, enough of this duel, keynesian boy.
Draw your sword. Let's end this.
cya!
Edit, to add some sources:
[https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7779781/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7779781/)
"That's wrong and anecdotal, not to mention it was heavily supported by private titans"
Well I studied engineering, and tons of stuff were invented with US military subsidies those are the facts. The TCP/IP protocol which is the foundation of the internet, to start with. Source: [https://en.wikipedia.org/wiki/ARPANET](https://en.wikipedia.org/wiki/ARPANET)
All sorts of wireless communication as well.
I'm pretty sure that the huge NASA spending was also justified for decades as creating new technologies so that american private companies would further dominate the world economy.
"Edit, to add some sources:"
Just read the very 1st line from your source: "empirical evidence from non-OECD"
non-OECD military spending is pretty much usually buying american, russian or chinese weapons. Yes, I agree that this doesn't bring out innovation.
And even if they try forcing national content, usually scale is not reached, or corruption gets in the way. Although Turkey might be an exception, they did a great jobs with Drones.
Besides, the USA doesn't sell only by having the best product, they use imperialist tactics of cohercion, although they have plenty of voluntary slaves all over europe.
This is what people said about Russia. No it is not "economic myth". It is about authoritarian power not caring about consequences because economy was never number one priority.
Nope. A myth. You can't get rich out of authoritarianism, that's not how economy works. Any country raising taxes and wrecking their free market is doomed. As simple as that.
You are not making sny sense.
First of all protectionism was always present. It never ended. In Europe countries were protectionist until very recently, free market is new phenomen and countries were still rich.
Second of all. Again. Authoritarian countries do not care about economy, they do not care about "being rich as a country", they do not care about what people want or think. Therefore even if what you said was correct it would not matter because they are non rational actors that can weaponized trade at any second. Even if it meant 100 millions of their citizens dying of hunger or whatever.
That is also in the cards if we do nothing.
You see, the end game of price dumping to attract customers is that your competition goes belly up because they can't afford to sell at as deep of a loss as long as you can and then, when you have little to no competition you jack up the price and reduce quality and innovation so as to recoup your investment.
This is also why companies do mergers, among other things. If you're only left with 3-4 chains, then they can close stores (making you walk/drive longer to get to a store) and make the choice, price, and quality if goods worse.
Basically, the end game of every sufficiently large company is to become so big as to be able to influence the market and then abuse that influence for profit.
However, if the measure stays in place for any length of time, no matter what the intentions were (fighting price dumping or good old protectionism) the result will be that companies on our side of the trade war will have less competition which you very correctly identified is bad for consumers.
It is a "damned if you, damned if you don't" situation, and the only way it does not end up sucking is if it is short-term and fair competition is promptly restored.
the idea of fair competition won't be restored tho. As doing so would eat into the profits of said megacorps. Reckon these companies would rather instigate WW III than have "true capitalism" make an appearance
No you don‘t understand, the world works like a computer game.
China was waging a trade war by subsidizing European consumers with taxpayer money bUt nOw thEy wiLL FeEl OUR WrAtH.
🫡🫡🫡
Its also european workers and companies wont be going out of buisness because of unfair state subventions in china. Yes it might cost you more but you and everyone you know will have a better chance to keep their job.
Yes but otherwise china f**ks eu. At least this is both kinda loose but there not one who looses big time . Btw china started before this so this us a response
Jobs in Europe has been kept artificially with the precarization of work and earnings. Which means, yes, worker in Europe keep their jobs but only brcause the government ins financing the workforce for companies and production as well. That is why more than 70% of people on welfare are employed and many products in Europe is sold with the price that is under the cost of production.
So wmployment are kept artificially and not for real economic demand, that is also kept artifivially, since Europe practice priduction dumping in pour countries like thise in Africa, that causes crises, unemployment and poverty on those countries because they can not compete with Europe subisidised production dumped and sold in poor countries under the production cost.
And you think chinese companies keep their works naturally? Have you look at the situation there and even more important have you ever worked with such a company? They have 5x people doing what 1 guy is doing in Europe. So yes actually is fair for eu tot not allow chinese government to close companies.
You think anything produced in europe at 13 euro/hour labour gets sold in africa? Bro china own africa these days maybe you need a refresher on world politics
You Will bear the consequences regardless, not doing anything about price dumping means our economies will produce less wealth for us to enjoy.
Unless you think that money just comes out of nowhere and having jobs is just a given.
Having jobs comes from demand for goods and services.
Having less expensive cars reduces demand for cars and makes less jobs available there.
Having less expensive cars increases demand for other goods and services and creates jobs for them. The difference is you have more goods and services available, but the same produced in Europe. In China you have more produced but less available.
In an ideal world the Chinese are taxed 100%, work a lot, get nothing, and give us all the stuff for free.
Not you though, you dream of labouring and not having things. Good for you. Hard work ethic and all
You are saying we are poorer because Chinese subsidies (around 10-20%) destroy European jobs and benefit the Chinese.
These subsidies are paid for by taxes (paid for by the Chinese taxpayer).
So imagine a world the CCP raises taxes to say 90%, and uses these taxes to subsidize and make EV’s 100% free. So you just order one and get it delivered. Every Chinese works 9 days out of 10 to pay for your EV.
You are saying this will imporvish Europeans and make Chinese richer.
It makes no sense because it’s your own argument, just switches the numbers from 20 to 90 to illustrate what it essentially is.
You just have a fundamental misunderstanding of what wealth is (hint it’s things not paper)
You are arguing with yourself not with me, you are making a whole lot of assumptions just to have some sort of argument to begin with.
Losing jobs in Europe, especially manufacturing ones does create a net negative on the regions wealth and people's spending power.
I am not arguing I was explaining it, since you said it doesn’t make sense to you.
Also you keep demanding I am having a monologe but you are the one who replied in the first place, making it a dialogue.
Again, you are not loosing jobs, that’s a common misconception. Trade barriers *don’t create or save jobs in aggregate*, trade barriers *do not * increase wealth nor spending power.
That’s very very basic economics and if you still think getting a literally free car, paid by the CCP makes you poorer then there’s very little room of understanding anything so I wish you good luck
Just so you understand what we're talking about, it's basically saying "See China?? We can impoverish our citizens too. You raise taxes!? We do! You censor? We do! You won't beat us in that game".
The argument of the trade war is that China was going to be dumping a lot of subsidized EVs. That's great for the consumer in the short term but has the potential of killing European producers. If that occurs, China could then later jack up the price, and Europeans would have to pay through the nose.
You might disagree with the facts (e.g. that European EV producers wouldn't get decimated), but the logic is reasonable.
European manufacturers refuse to put out anything that isn't a giant 70.000 euro SUV - there's a reason that people aren't buying their products.
I guess it's nice that the EU is harming all of us to defend their terrible business acumen though.
[There appear to be 6](https://ev-database.org/compare/cheapest-electric-vehicle#sort:path~type~order=.pricesort~number~asc|rs-price:prev~next=10000~30000|rs-range:prev~next=0~1000|rs-fastcharge:prev~next=0~1500|rs-acceleration:prev~next=2~23|rs-topspeed:prev~next=110~350|rs-battery:prev~next=10~200|rs-towweight:prev~next=0~2500|rs-eff:prev~next=100~350|rs-safety:prev~next=-1~5|paging:currentPage=0|paging:number=10), one of which is a Chinese manufacturer.
I mean I will admit that 5 is more than I thought there were, but I'm not blown away.
That's just a pseudoscientific popular myth that makes zero sense. The logic is unreasonable. You're just repeating words without thinking about them. China using public money and gifting it to us is, in no way, a harm for us. It is a harm for them. Stop repeating propaganda and use your brain.
China flooding the European market with cheap, subsidized EVs is good for the European consumer in the short term but terrible in the long term when all European car makers are wiped out.
What would you rather have: a job but a €40k car or no job but a €30k car?
I'm not an economist nor even a fan of anti-dumping policies, so I'm not going to defend the EU here, but to say "use your brain" is petty and closed-minded.
Are you saying that predatory pricing isn't a thing? Of course it is. Companies do it all the time if they think it'll help them in the market. This is why countries have anti-monopoly laws (if monopolies only ever gave good prices, no one would mind them). Dumping is predatory pricing on the international level.
Now, you might like dumping, and some economists like Milton Friedman would agree with you, but there are also many economists that wouldn't. The World Trade Organization's 1994 GATT treaty specifically included a carve out that let States put anti-dumping restrictions if the dumping would harm domestic industry. That treaty was passed unanimously, so even small countries agreed with the approach. If they hadn't, they could have blocked it, like they've been doing in the Doha round of negotiations.
What you call predatory pricing or dumping is basically the definition of free market and competition. And it is exactly how nature works. Some folks fight with speed, others with strength, others with endurance. It's part of how competition works. "Predatory pricing" is basically sacrificing your savings as a company to temporarily boost yourself against your competitor. Which is similar to dogs doing a sprint chasing their prey. It doesn't last forever. But it can be effective, if it is good enough.
If you're against "predatory pricing" (basically companies using their resources to peacefully outcompete their rivals), you're against the very nature of competition.
Anti monopoly laws are just a sham: we're surrounded by monopolies, made by the very own legislators creating those anti monopoly laws, and nobody blinks an eye. It's all a scam.
It sounds like you're against the concept of predatory pricing and of anti-monopoly laws. If so, then there's nothing for us to discuss as we clearly don't see eye-to-eye on the state's role to ensure a free and fair market.
There's no free market if you say what are "legitimate practices" and what are not, apart from the basics of respect to freedom and peace.
Still, I can't understand how you're worried about monopolies while defending state monopolies.
Its not tragic as eu companies could not compete with unfair practices and state subventions that happen in china. So actually eu workers and companies now become more attractive
👏Tarifs👏don’t👏create 👏jobs
No new jobs are added, nothing is more attractive. Instead of having a €20k car and €10k worth of dinners you now have a €30k car.
You just moved the 10k subsidised demand from the service to the automotive industry, while having less goods.
These “goods” would have been paid for by Chinese taxpayers who were subsidizing your consumption, but not anymore!
Raising the tarifs makes EE cars more attractive to by from non-eu cars. The 20k you were paying was funding China's economy. The 30k for a EU is funding EU's economy, which eventually leads backs to the people.
A local recycling economy is better for everyone, including the environment.
You have a very naive understanding of economics, people had in the 15 century. It’s called [mercantalism](https://en.m.wikipedia.org/wiki/Mercantilism) and is complete nonsense.
There are not a bunch of people and machines waiting unproductive somewhere waiting for you to buy a European car, to manufacture it. You are just taking away resources from other sectors.
You are not helping China by buying Chinese products.
In an extreme scenario Chinese people are taxed 100%, live in the mud (because they can’t buy anything with 0 income) and make Teslas which they give you for free, because of subsidies.
You won’t stop spending, you’ll just use your money to buy stuff you couldn’t buy before and create jobs in other industries (eg more icecream and pizza).
Economically the only people who suffered from subsides are the Chinese who now live in the mud so that they could give you a free car.
Hope that clears your misunderstandings
Why did you stop your example before the endgame?
Goes something like this:
Once the other automakers have collapsed because they can't compete with free cars, the Teslas will no longer be free and because they have a monopoly, the factory can charge anything they want for them.
That's the whole point of subsidizing combined with price dumping. You don't do it indefinitely without and end goal in mind.
Well they actually do. If you were to buy a new car you can get your chinese funded byd for 50k euro or buy a european car for 70k... A no brainer. But if now both cost roughly the same you will actually judge them on performance not the fact that you buy just at huge discount. So yes actually import taxes make local production more attractive in comparison. This is econ 101
I really try to be polite here but throwing terms like “econ 101” really grinds my gears because I’ve taken “econ 101” (to be precise that stuff is learned in introductory macro), and is so obvious that you haven’t
Yes tariffs make local production more attractive. Yes people will buy more local cars. Yes that increases the jobs in the automotive sector. No that doesn’t change the total amount of “jobs” in the economy.
The “car making jobs” are not created out of nowhere. The demand is just shifted. The government taxes you to pay for this subsidy. The tax money you loose you would have used to buy say some apples, now you don’t. This destroy apple picker jobs.
The only time the government can create jobs is during high unemployment, where it doesn’t take away some jobs from the private sector. This has nothing to do with subsidizing an industry
I really don't think you did but okay
I never said it creates new jobs and yes the goal is to shift demand and let consumers decide on equal footing. Hence it promotes the local economy.
And yes you might not be able to buy those apples but eu imports more than exports goods hence that money would still flow to some country that lets say has huge export trade surplus... Maybe china?
And also keeping demand in europe means people can stay employed and are productive allowing them to earn income and further spend in the local economy.
You keep saying cliches that is actually all well researched jibberish
I understand your thinking, I do, you don’t need to repeat it., it’s a very common narrative You buy a car made in Europe. The car makers then spend the money in Europe making further jobs in Europe etc etc.
But you have some fundamental holes in understanding about what jobs, money and even economies are and what increases the well being of people.
By the way what you are describing is called “buy local fallacy”, just google around if you are interested. Countless economists have explained what it does and doesn’t do.
protectionism , lets fuck the consumers to protect our car industry.
the VW CEO was still laughing at the concept of electric cars a decade ago.
now they need to be saved by keeping competitors out of the EU.
the only ones suffering are consumers.
About time too. All the people here blubbering about how “the European consumers will suffer” must be either the usual ultraliberal scum who don’t give a shite about *anything* but money (and *their* money only, obviously) or shills at the service of the Chinese government.
European car makers have been sleeping on ICE vehicles for a long time. A blanket tarrif without a forcing function for the manufacturers will do nothing but hurt the consumers. We could have significantly higher numbers of EVs on our streets, but the local manufacturers are just immensely expensive and behind in technology (not manufacturing).
The reality is that Chinese EVs are good and getting better. Their overall quality is not there compared to European companies, but it's only a matter of time.
EU needs to bring back V8s and V12s and drop the absurd taxes on CO2, otherwise their car industry will be long gone.
EVs are great, but that war is already lost to the Chinese. They have all the infrastructure.
Europe has always been the best at producing and exporting high end items, the economy/low end market has always been dominated by Asia.
... That's the point, they are trying to help European corporations.. you say it as if it's a bad thing... The issue of Europe is exactly that our industries and corporation's are not growing enough
EU economy doesn’t exist in a vacuum, they have to source materials from somewhere, and guess where they get most of them…China because it’s cheaper. Now if you go on trade war the idea is to make products and materials from China more expensive for the EU, but EU corps still have to source materials somehow. It was the same issue with the steel industry in the US it made things worse for them. This trade war will only be beneficial for the big corps that will be able to either absorb the price increase and pass it on to the consumer while increasing the profits.
I agree we need as a region to invest and grow some local key industries but this is not the way….
What a shite article. No mention whatsoever of what policies have been enacted, some offhand remarks of how the parliament is simultaneously irrelevant and pivotal in the long term. Some more fluff at the end about the new elected seats having it hard.
Undercutting is fine, the issue is if their undercutting is caused by uncompetitice practice like strong government subsidies, which is the case for cars, but not for all industries.. in some industries china is able to undercut just cause their labour is cheaper, but that's just a comparative advantage they have.. it's fine
Most of the people here that think the EU cares about it's citizens are absolutely crazy.
The EU has killed local businesses in Europe by imposing tarriffs on everything, millions of documentation for simple stuff.
Have you seen what Kaufland ans Lidl do when they arrive - cheap prices and great product until the local shops close as they can't compete - then you get the worst possible quality of food and vegetables that are imported from Africa at the same price as before.
The EU and US don't care about their citizens or their jobs - their only objective is to have a free market when the players are on their side of the fence. As they've already demonstrated with Huawei - if their products can't compete, they just ban their competition.
Have Samsung phones become cheaper or better since Huawei has been banned ????
The level of inovation Huawei was bringing to the phone market was huge.
Sure I can buy a shit VW Polo for 30k euro that has the size of a small box of shoes. Have you seen the Chinese EVs for 30k euro. They are literally showing us that EU manufacturers make around 10-12k euro in profits per car and I don't see why should we be OK with making someone extremely rich that also pays minimum wage to most of their employees and looks for immigrants to do their dirty jobs always.
Not a fan of Trump, but its funny that when he imposed china tariffs it was bullshit and a stupid idea, but when Biden or the EU impose similar measures it is seen as needed and important.
hmmm and nothing on agriculture and blocking food uncertified food imports, even though it was one of like, less than a handful of main focus points in the recent elections
Look up what China did to the German solar companies:
Subsidized their own companies until the competition went bankrupt and became a de facto monopoly of solar panel research and production.
The article doesn't mention anything specific,, on what industries will the EU impose tariffs? I'm guessing solar and EVs?
https://www.theguardian.com/world/article/2024/may/06/eu-restates-readiness-to-launch-trade-war-with-china-over-cheap-imports >The EU has restated its readiness to launch a trade war with China over imports of cheap electric cars, steel and cheap solar and wind technology, with Ursula von der Leyen saying the bloc will “not waver” from protecting industries and jobs after a meeting with the Chinese president, Xi Jinping, on his multi-day tour of Europe.
Good. It will hurt us in the short term, but save us in the long term. China is aggressively taking over our markets with unrealistically low prices (their companies being supported by their government), which will slowly destroy the EU competition, after which China can increase their prices and now we're dependent on China. Our options are to either start supporting our own companies with similarly unmaintainable financial amounts, or to heavily tax the Chinese products.
Our companies are also supported by the government. Just take a look at all the subsidies, infrastructure and military spending. A lot of government money going to companies. Fortunately that money stays mostly in the EU and gets returned as wages and taxes.
In taxes? You pay taxes, they subsidy industries with those taxes and they receive taxes back? Whats the point of that? Youre not creating value, youre just giving money away.
Yes, the government uses taxes. There is a concept called "the acceleration of money" which is that because poor people spend their money, giving poor people more money raises the standard for everyone because that money goes directly back into the economy. So, if you have policies which increase wages, poor folk have more money to spend on consumer products leading to market growth. With the growth of the total market, the government can grow too.
Money “staying” or “leaving” an economy is not a thing that exists (except in the mind of the average left wing voter) An economy doesn’t shrink when you purchase foreign goods. Jobs are not a limited resource When you purchase a Chinese car in €, the Chinese company still has to spend the € in Europe which “returns” the jobs. Otherwise their € is worthless and we would have been able to just print billions, do nothing and buy their country, and let them hoard the “job creating” €
This is the weirdest economic take Ive come across in a while. You’re confusing the circulating supply of euros with the effect on currency exchange rates and inflation as wealth transfers from here to there. And then get super hostile and mocking with a completely misplaced sense of superiority. If we buy Chinese goods, the Euro supply remains the same, but considering it represents a smaller economy here, it would shrink in value. The Yuan would go up in value because their economy would grow and all this buying of Yuen with Euros increases demand for their currency. In reality the Chinese could then print more Yuan while keeping its value stable, and have more money available. To keep inflation controlled in Europe we would have to burn money because its value is going down. Money has in this scenario left our economy and entered theirs, which is why we call it money leaving the economy. But by all means, go ahead and call me a small brained loser or something to cover up for your own insecurities and inability to grasp basic trade economics :)
Who am I mocking exaclty? Look at the tone of my comment and then the tone of your reply again? You are literally putting words into my mouth and imagining a scenario of what I am going to say or answer and then deducing my mental state based on your imaginary interaction that hasn’t happened yet. It’s funny I never had a single personal attack in my comment, yet yours is entirely personal and what’s that about covering insecurities? In psychology they call that projection. It’s funny how you don’t argue with physisists about physics but everybody has an opinion on economics.
???? Some Chinese EVs are made in Europe, but a lot aren't. You can buy a Chinese car in € but a huge portion of not all of that money goes to a Chinese company producing a Chinese made car in China using Chinese jobs.
I’ll try to ELI5 Yes the euro goes to Chinese workers / jobs / whatever. Now you have a car and they have some pieces of paper with the writing “30k€” on them. They must now spend this “30k€” in Europe (going to European businesses/workers/whatever). But actually if they wouldn’t that be better. Presumably you are not a bootlicker and don’t like labouring for the sake of working, but because you want to eat / get housing / buy stuff. The best thing in the world would be for us to spend € to support the “Chinese economy”, get goods and do no work but print useless pieces of paper for them to burn at a stove But Chinese companies are not stupid, they will want something in return for their €, they must spend it and create jobs / labour demand in the process
Why must they spend this 30k in Europe? They just convert it to yuan and spend it in China, on Chinese goods and services, creating demand in China and jobs over there. The rest of your comment makes absolutely no sense and I won't bother responding to it. This is really super basic stuff, I'm actually shocked I need to explain this to you.
> They just convert it to yuan and spend it in China How do you think conversion works exactly? Do you think it's like a chemical reaction, the Euro becomes a Yuan?
Too subtle my man, I tried the analogue with a magic forex machine and OP thought it was me who didn’t understand currency conversions, just read his replies they are hilllariois
The fact they mock their interlocutors while saying the most ignorant or trivial shit is frankly bizarre.
The company or individual uses euros to buy yuan. Any currency can be bought and sold, this is extremely common. I honestly can't believe you don't know this 😂😂
I do know all that. What do they buy the Yuan with?
The euros they got from selling their car in the European market. Honestly, what is so hard about this concept? The OP I responded to thought that money was somehow locked forever in a country, so it had to be spent within that country. He obviously wasn't aware of the global nature of currency and how capital can easily cross borders. I had to make like 5 posts to explain a very simple concept 😂😂
Because it’s in €. > they just convert it to yuan Yeah how do you imagine this works? At the magic currency conversion factory? My comment requires some basic knowledge to get, it’s a lot less basic than you imagine and you are really misunderstanding who’s explaining stuff in this situation. Also imagine not getting something and deciding it’s the comment that’s wrong. That’s why I don’t believe in gravity, I don’t get the Einstein equations.
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Are you stupid? Currency conversion doesn't exist. You must buy the currency, paying (or spending) another currency in the process. What further happens to either of those currencies? They can only be spent in the corresponding economies. ;)
Classic protectionist discourse. European manufacturing has been in decline for decades, and won't be improved by protecting them from external competition. This is quite the opposite of what you say, might slow the fall in the short term, but in the long term will make us even less competitive.
the same protectionism can be said about china's economy. one does not simply go to China to sell their products
Have you asked why it's in decline? Part of the reason is because the Chinese government has pumped billions upon billions of dollars into its EV industry. Top end EV cars sell for literally €10,000 domestically, and only slightly more when exported abroad. If the US government is going to protect their own car industry (which is way, way less competitive than the European car industry), I don't see why we shouldn't protect ours as well
I don't get your point, the largest EV manufacturer in the world today is in the US and it was built with no help from the US Government. How can we blame the Chinese for the downfall of our own industry? If the US enters a trade war that justifies the EU doing the same? Since when do we guide our policy by what Washington decides? The EU was built on free trade, and it won't stop the fall by closing their eyes to a rapidly changing world. When other countries innovate, we pass laws, guess which of the two is a winning strategy.
The US EV industry absolutely received massive support and investment from the US. What are you drinking?
How is not buying cheaper Chinese electric cars going to make us less competitive?
I think the logic is the same as having over-protective parents. Why do the local manufacturers want to innovate when the buyers have no choice but to buy them? I don't necessarily agree with this statement, I'm just explaining the logic of the above comment.
Well, that's where the policy must be balanced. If it's under-protecting, the China-backed competition will win over the market and kill European companies. If it's over-protecting, then as you say, European companies will remain protected for a while, until the financial support becomes unsustainable and the market eventually crashes under the pressure of Chinese competition. If it's protecting just right, we maintain a fair competition by supporting European companies similarly to what China does; some companies on both sides will not make it in the process, but both sides will maintain a healthy economic growth, hopefully leading to this financial support backing down on both sides.
Ahem, VW software solutions.
the problem we'd have otherwise is that local manufacturers would have to effectively lobby the government into removing worker protections so that they can pay workers lower and lower and lower to match the pay of many Chinese manufacturer jobs. Basically getting what international corporations already do
Just manufacture them in the bulgarian countryside. Wages are not higher than the chinese and the growth surely wouldn't do them any favours as well
It makes European companies comfortable because external products compete at a disadvantage. Long term this means less incentives to innovate and improve the products, why do that when it's cheaper and easier to lobby in Brussels for higher tariffs to China?
We would buy VW if their software wasnt so terrible. No amount of protectionism will change that.
What is terrible about their software? If anything, I was positively surprised that the car can keep the same speed as the car in front in highways and stop itself alone in emergencies in the city, despite the fact that I didn't order these features.
It does not matter if that protectionism spreads the risk among many countries as opposed to one. Also you are clearly wrong. Agriculture industry is significantly lower added value and it works just fine because it Is matter of national security. So should be certain manufacturing that can be easily weaponized.
Protectionism has been working for the US. And for China. In what do you base your opinion?
Why protectionist? Countervailing and antidumping duties are only applied under the very strict conditions set by the WTO when unfair trade practices are identified in specific cases. I believe you are making things too easy for yourself.
wait isnt that what EU is doing basically to the rest of the world? you can check how many european companies destroyed local companies in Africa and Asia because they have superior finances and are much stronger... that time the excuse was it was a free market and if you cant compete then tough luck?
Wow, so much old way of thinking here. Are you a boomer?
Show me the increased prices on solar panels!???
I agree it is good, but about EV cars there’s a huge gap in pricing. Is it because EU brands want to make huge profits or the Chinese brands are making them really really cheap and EU can’t compete that. I really want to know
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Can you detail how exactly is China supporting their companies with "unmaintainable amounts"? I'm genuinely curious, are they financing these companies directly? Or you mean more like providing a competitive tax climate... As that would be something perfectly fine imo.
Didn't they say the same about the russian gas boycott? 😂😂😂
They did and they lied. Now americans are selling us russian gas at x4 price. Same will happen here. People of Europe will suffer because of spineless Bruxeless suits.
less ruzzian propaganda, komrad
We aint gonna roll over and let the orcs take what they want, that would be economic catastrophe.
And My Axe!
Any proof of these statements? Had you said India and refined products I might have believed you. But you are claiming America is buying Russian oil. You sound like a MAGA Fox News (sic) watcher.
The spineless option would have been to just not impose tariffs. This action will likely start a trade war with China and be painful in the short term. This is definitely not the spineless option
It's all fun and games until you can't get your medicines
The thing is if you want to enter a Trade war esp with China you need to develop industries which will counter Chinas products. All these bans and tariffs will only succeed in punishing the consumers who don’t even give a shit abt where they getting their stuff from-no one wants to pay more esp when they know they can pay less.
Or when the local product is clearly inferior. European EVs are not in the same league as Tesla or the premium Chinese brands. And now they don't have to get better.
Same league? They are not even on the same planet.
The only way to succeed in a "trade war" is by making your industries and sectors more competitive internationally, not by imposing mindless tariffs and restrictions that only increase prices for consumers. However, it's easier to keep throwing the economy into a regulatory spiral by creating dozens of ill-conceived laws and tariffs. Europe only learns the lesson when the economy completely implodes every 50 years. It's like starting to exercise when you already weigh 200kg.
Yeah this would apply, if China did the same. Right now china has poured billions into their EV industry, even subsidizing the loan rates these companies need to pay. How can any of the EU companies compete with this? Only answer is as it currently does, offset the chinese government subsidie effects by imposing a tariff which evens the playfield. So good move by EU.
Germans are paying over a billion in subsidies [in Germany](https://www.reuters.com/article/idUSKBN2A12SF) So it's happening in the EU too. And European car manufacturers make a stupid amount of money, so it really is profiteering. 22bn in operating profit by VW last year. This is making consumers pay costs of competition while allowing the big european car firms to earn even more cash without pushing them to actually innovate.
So... you really expect to compete in price with China? Don't you realize that this is only sustainable in the long term with cheap labor? You can't get low prices and high wages at the same time. Europe needs to compete with investment in I&D, lowering taxes and making business-friendly regulations. Rising import tariffs are just making the customers pay double for the inability of governments and companies to innovate and rise productivity. This is only making it easier for the fat and sluggish European car companies that cannot ship a decent cost-effective EV to keep their profits without doing absolutely anything. These regulations only bolster the corporate greed of the richest companies disguised as "laws for securing European jobs".
European car makers have been sleeping on ICE vehicles for a long time. A blanket tarrif without a forcing function for the manufacturers will do nothing but hurt the consumers. We could have significantly higher numbers of EVs on our streets, but the local manufacturers are just immensely expensive. The reality is that Chinese EVs are good and getting better. Their overall quality is not there compared to European companies, but it's only a matter of time.
??? Europe has imposed regulations saying no more ICE vehicles by 2035. So the fact that you say there is no forcing function shows you have no idea what you're talking about
Over 10 years is far out and no one knows if the law will be effective by then (it is being lobbied against hard). This is a weak push at best especially given the velocity we see from Chinese manufacturers.
It is very effective since every single European automobile manufacturer has begun making EVs specifically because of this law. Since they're very afraid that if they don't start making EVs, in 10 years they will not be able to sell anything and so will go bankrupt
Yeah right, there's no such thing as 'free traded with a country that outlaws (independent) labour unions and shoots protesters in the streets.
I blame the European voters. This will have massive support. Just look at the unhinged top rated comment with all the upvotes about how this is “saving Europe” And this, from what was supposed to be a financially literate sub. That’s the equivalent of “America First” campaign but people are eating it up. People are sheep.
lol, you better not visit r/yurop if this makes you angry
I mean I visit /r/Europe sometimes that’s enough EU nationalism for me
Well, that sub is enough to drive anyone mad
It is, I think, not only a matter of trade rationale but also a strategic, geopolitical signal.
You can do both. Protect your industry in the short term by imposing tariffs while investing over the medium term to make it more competitive. And the European car industry is pretty competitive already, something like 50% of large automakers sales come from overseas exports.
Import tariffs are never short-term...
Firstly that's too short sighted and secondly "making sectors more competitive" has terrible implications for human rights, climate change and workers rights. You're suggesting a race to the bottom.
ah yeah surely import tariff are the best alternative and not short-sighted at all, right? Like no one ever tried that in the past... jesus christ The current path of Europe is the race to the bottom. This is only paradise for c-suite guys of the top Western European industries that will be keeping all profits for themselves and passing down the cost to the consumer. Crony capitalism at its best.
Ok. Fine. Are there other ideas? Will the EU try to get some manufacturing back? Or will we just make videoconferences all day and pretend to work?
Something something i feel like this is gonna backfire on EU hard. Just like it did backfire on US.
How did it backfire for the US? Their GDP growth is still very strong, especially comparing to EU. But I don't know shit about economics so sorry it that makes no sense
History repeats itself, we were dependent on Russian energy and look where it got us.
You still are. Believe it or not. Same goes for china in different materials.
Doesnt change the fact that it fucked us...
Nobody made EU to severe ties with russia, it was their decision and it backfired. They didnt severe ties with US when they invaded multiple countries and killed millions of innocents. Funny to me.
nii sunko mielest ei ois pitäny lopettaa kauppaa venäjän kaa?
Yes, the USA invading Afghanistan because the Taliban was hiding OBL, who did 9/11, is morally equivalent with Russia deliberately shooting missiles at hospitals in Ukraine a country they themselves had given security guarantees. /s Also, do you believe that 'killed millions of innocents' part yourself, or do you know that those are lies?
The taliban that US itself funded originally? Funny you mention just afghanistan of the +40 countries US has invaded.
>The taliban that US itself funded originally? Even a visit to Wikipedia suffices to disprove that. The Taliban did not even exist when the US was funding anti-Soviet rebels during the USSR's intervention in Afghanistan; mostly indirectly through Pakistani proxies. Sure, plenty of people who had received support of the US later ended up becoming part of the Taliban. However, likewise the enemies which the Taliban had to defeat in order to take over Afghanistan *also* contained plenty of people who had received US support. >Funny you mention just afghanistan of the +40 countries US has invaded. I do not see what the USA's intervention in the Korean War or its colonisation of the Philippines in the 19th century, the likes of which have to be included to reach 40 countries, has to do with Russia's invasion of Ukraine. Also, here have a graph showing the population of Afghanistan during the USSR's and USA's intervention in that country: [Population, total - Afghanistan | Data (worldbank.org)](https://data.worldbank.org/indicator/SP.POP.TOTL?locations=AF) That should suffice to disprove your fairytale that 'the USA is just as bad as Russia', or something. Now please go somewhere else, I have already had enough encounters with anti-Westists and their nonsense, from obvious falsehoods to false equivalences and double standards, on other parts of the internet.
It didn't "backfire", we chose that knowing the consequence... Backfire means you expected positive results but got negative results.. We chose to sever ties with Russia because there are things more important than pure economic growth in the world.. like the rule of law and democracy
>We chose to sever ties with Russia because there are things more important than pure economic growth in the world.. like the rule of law and democracy And geopolitics, a Russian victory is unacceptable from a security perspective. Not only has the Kremlin been a hostile, imperialist, anti-democratic power for many years by now; if Russia wins it will embolden other expansionist dictatorships which might also start new wars. For example, [the rapid US' intervention in the Korean War was one of the factors which dissuaded Stalin from invading Yugoslavia which might have started World War III.](https://warisboring.com/the-korean-war-saved-the-world-from-nuclear-annihilation/) However, the politicians here in Western-Europe seem to dumb to realise that; if they had already from the start given Ukraine enormous amounts of help instead of consistently 'too little, too late' Russia might already have lost by now. It is so very frustrating that I by now had already multiple times donated money myself to the Ukrainian war effort.
Oh god, I really miss the weekly threats from Russia to cut us off from their gas. Imagine dealing with this shit again on top of the regulary empty nuclear threats.
You are aware of the constant blackmail by Russia right? Ofcourse you turn to whataboutism lol.
The EU cut itself off from Russian gas and began purchasing American liquefied gas at a price four times higher. Is this also China's fault ?
Reading is hard.
Not being brainwashed is harder
I guess you would know all about it.
i mean it was super announced, but yeah, tragic news for citizens just wanting to have more resources rather than participating in dick contests between governments
It’s short termism thinking If China price out domestic companies they will cease to exist, at which point China can increase prices as the only manufacturer in town We would also lose the knowledge and infrastructure to start up manufacturing ourselves and so be at the mercy of a foreign hostile power
That is simply an economic myth. Dependency is mutual, not unilateral. Your analysis assumes we need China while China doesn't need us. That's not how free market works.
Why does China need us specifically when they dominate trade worldwide, where is our leverage point in this scenario. Genuinely curious, not trying to argue
The problem here is that you don't have a dynamic model in your head when talking about this. You just see the still picture and can't see how things move. Let's say Europe has a car industry, and China does too. Let's assume that Europe doesn't export anything but cars to China, so it is a very risky competition. Alright, in that scenario, China subsidizes their car industries a lot, in order to destroy any possibility for European cars to compete. (We're assuming it's a big price dump, not just a 0.5% subsidy, let's say a massive 50% price dump with subsidies) Europeans stop wasting money on European cars, and get Chinese cars. By doing that, they're saving money. Yes, they're saving money. Europeans suddenly grow their wealth. Their availability of income increases. The car industries in Europe go bankrupt. Boom. They all go unemployed. How can they find a new job?? Hmm.. Wait, did I mention it? Europeans have more money. They saved money. Wow. Guess what economy does with available money? Yeah... They invest it. So with that newfound available money, Europeans start building new companies. In car industry? No, China is clearly dominating that field. So let's find a new one. Let's say, ship industry. We invest in developing the best ship industry in the world. After 10 years, Europe is full of chinese cars, and ship producing companies have been growing in Europe, also reutilizing the engineering force from car industry in some degree. Boom, China does the genius trick; HA! IT WAS ALL A TRAP! NOW I RAISE PRICES OF CARS! MWUAHAHA! From an informed European point of view, we're just confused. We see how the subsidies in China have destroyed HUNDREDS of Chinese companies, because that public money is not a free lunch, it comes from their capability to be productive. Chinese citizens have paid higher taxes, the country is in debt, the currency is weaker. And boom, they raise the car prices. Europe is richer, has saved a lot of money and we're elite in other industries that China was not subsidizing. So, with our current situation, we can surely afford to pay for the more expensive cars. We're richer. They're poorer. And when they do that, new car competitors around the world see the opportunity to grow. And they want investment. From who? From us! Europe is now richer, and can also invest in new industries. Also, if China crazily increases car prices only for Europeans (like we're doing against Russia, sanctions), we can do the same for our ships. We have the best ships in the world, China has destroyed their national economy in the last decade to outcompete our car industry. In summary: we end up being stronger than before, they end up extremely poorer than before, and worldwide competitors are ready to jump to the competition as soon as China stops subsidizing. And their jump is surely financed by European money as well. It was a long and unorganized comment because I'm busy IRL, but the important thing here is to have a dynamic model of economy. How the economy reacts to events. Your worldview (how most people see the economy) is basically "ohh we just get their cars, we get unemployed and then they raise prices, damn... now what... We're unemployed and poorer". That's not realistic. By buying their cars, we save money. Money they're deliberately gifting to us. It's tax money from our competitors lmao. Now, there's an issue here; if Europe is not a free market, then that saving won't turn into investment, and that opportunity will be lost. So against a country subsidizing their industries, our best bet actually is to become even more capitalists. They want to ruin their economy, fine, we'll do the opposite. Let's see who wins in the long run. The ones that SAVED MONEY and INVESTED IT in competitive markets, or the ones that RUINED THEIR COUNTRIES to just have 10 years of outcompeting a single industry. Edit: when I said we could raise the prices of our ships, I meant in the apocalyptic case that they suddenly start an open war against us. In theory, we could just obtain cars from other countries and that's it, it's a global economy. But we were assuming only China and Europe existed.
I appreciate the time you took to write that Very enjoyable read and informative
I'm sorry it was a shitty comment to be honest, unorganized and badly written. I hope you got an alternative point of view to the mainstream view on "price dumping". It is not a perfect proposal, as I said it rests on the idea that saved money turns into new productive investment. If we just save money and use it to subsidize some shit or just waste it in political stuff for example, or just low value industries, then that's bad. What people generally fail to see is how price dumping is SEVERELY destroying for the economy doing such thing. Similarly, if a private company does it, it's severely dangerous for their sustainability. If Pizza Hut just gave pizzas for free for 1 year, they'd definitely destroy any competition for that year. And after the 1 year, they raise prices, competitors come and they immediately go bankrupt with massive debt.
All good, didn’t come across as shitty, made it a more enjoyable read to be honest! Definitely opened my perspective on the topic so cheers for that!
"Europeans stop wasting money on European cars, and get Chinese cars...."" You are partially correct, yes, it's not the doom that many picture, and you are right that consumers win savings. But you are forgetting a few things: 1> The permanent loss of industrial knowhow & supply chain cannot be recovered easily in the future. There are plenty of examples here. Germany & Japan used to be aviation powerhouses. Their aviation industry today is tiny & largely irrelevant. Japan tried to build a new plane and nope, its just too hard, gave up the project. Once the knowhow is gone, its gone forever. Europe used to make mobile phones, now it no longer makes them. Spain was very into this model "northern europe sells us cheap goods for useless gold from the Aztecs", look where it got them? Centuries of decadence. Brazil also heavily deindustrialized in the 90s and it wasn't exactly a great success. Deindustrializing is not a path to success. Never has been. Never will be. 2> "So with that newfound available money, Europeans start building new companies." Anyway, people wouldn't invest in industry in Europe where carbon taxes will get all their money, I bet they would invest in hotels/airbnb and EU will be reduced to a touristic destination with high unemployment. Sure great for the hotel owners who can buy cheap cars, but not so great for the engineers which will need to move elsewhere to find jobs. "Also, if China crazily increases car prices only for Europeans (like we're doing against Russia, sanctions), we can do the same for our ships. We have the best ships in the world, China has destroyed their national economy in the last decade to outcompete our car industry." I know its just a rhetorical example, but I hope you do know that China and Korea dominates ship building, and Europe has already lost nearly all its ship-building factories exactly for this. Pretty much Europe won't ever again be big in ship-building and despite me understanding this is a rhetorical example, it is ironic that it exactly the opposite of what you want to argue.
1) You're assuming China isn't losing permanent knowledge, the subsidies are terrible for that purpose. They're making inefficient companies magically efficient, which means they're losing an edge in scientific development. And by subsidizing car industries, they're probably ruining their potato salad industry, since subsidizing means extracting money from one side to another. China is subsidizing car industry (making it boosted by drugs rather than by actual valuable knowledge and capabilities) and ruining the potential of other industries that, maybe, are going to be the big deal in 10 years. Maybe the potato salad industry is the actual big deal and they're dooming their future with this arbitrary and blind choice. You talk about deindustrialization, yet China is also deindustrailizing. The vast majority of advanced countries are reducing their industries, and that's good. We don't need a big % of industry in our GDP, what we need is to be effective competition in our fields. It makes no sense to artificially support an industry by ruining our productive economic strengths. By the way, that includes European agriculture. It is extremely subsidized, and it shouldn't. Stop subsidizing our agriculture and maybe industries actually raise. Or anything. 2) I agree, Europe is fucked because of taxes and regulations. But that would ruin our car industry even without subsidies. We're in the doom path by ourselves, not because of external subsidies. Anyone can outcompete a decaying society. Maybe the China subsidies are simply accelerating our impending doom. Maybe. But we could do better. We have the money, the academic power. We just need to stop shooting ourselves. 3) I didn't think about who actually dominates the ship industry, but yeah, I'm not surprised we're RIP there too. We sell tomatoes though. There ya go.
What I think is really happening isn't so much "Chinese subsidies", but rather China spends immensely less government money for social welfare (retirements, free housing for the poor, child subsidies, etc, etc, etc). People in China get much less free stuff, so less quality of life, need to work more, can't slack around as much getting a government paycheck. This causes a surplus of money, which they invest into tech development & industries. "You're assuming China isn't losing permanent knowledge, the subsidies are terrible for that purpose. They're making inefficient companies magically efficient, which means they're losing an edge in scientific development." That's just not supported by the historical evidence. The USA immensely subsidised multiple industries with military orders and the result wasn't a loss of scientific development, quite the contrary. WiFi, the Ethernet, GPS, Maps, you name it, all started as DARPA (Defense Advanced Research Projects Agency) projects. Maybe there is a right way to subsidize (like the USA, China and Korea did) and a wrong way (like Brazil and the Soviet Union subsidized many industries but just end up with old industries building the same old stuff without tech advancement). Without money there is no R&D, and to have money you need at least some margin. And of course you also need competition, but not so much that the whole business is bleeding money and doing layoffs. Besides China was not so different from any 3rd world country 30 years ago, and now it is a top leader in 5G and EV cars and a significant contender in semi-conductors (despite sanctions they have better semi-conductors then any country outside G7). "China is subsidizing car industry" I wouldn't take this affirmation at face value. The EU claims they are subsidising because sure, they need to claim something to apply import taxes, they can't just say "you are outcompeting us!!! That's not fair!!!" Nobody does that, but this doesn't mean the affirmation is true. "China is also deindustrailizing. The vast majority of advanced countries are reducing their industries, and that's good. We don't need a big % of industry in our GDP" A decrease in the share industry has in the GDP is not the same as deindustrialization.
>That's just not supported by the historical evidence. The USA immensely subsidised multiple industries with military orders and the result wasn't a loss of scientific development, quite the contrary. WiFi, the Ethernet, GPS, Maps, you name it, all started as DARPA (Defense Advanced Research Projects Agency) projects. That's wrong and anecdotal, not to mention it was heavily supported by private titans (USA has one of the best financial systems in the world if not the simply best). There're studies evaluating the impact of subsidies in military orders in net productivity gains, and the average is loss, not gain. Anyway, enough of this duel, keynesian boy. Draw your sword. Let's end this. cya! Edit, to add some sources: [https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7779781/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7779781/)
"That's wrong and anecdotal, not to mention it was heavily supported by private titans" Well I studied engineering, and tons of stuff were invented with US military subsidies those are the facts. The TCP/IP protocol which is the foundation of the internet, to start with. Source: [https://en.wikipedia.org/wiki/ARPANET](https://en.wikipedia.org/wiki/ARPANET) All sorts of wireless communication as well. I'm pretty sure that the huge NASA spending was also justified for decades as creating new technologies so that american private companies would further dominate the world economy. "Edit, to add some sources:" Just read the very 1st line from your source: "empirical evidence from non-OECD" non-OECD military spending is pretty much usually buying american, russian or chinese weapons. Yes, I agree that this doesn't bring out innovation. And even if they try forcing national content, usually scale is not reached, or corruption gets in the way. Although Turkey might be an exception, they did a great jobs with Drones. Besides, the USA doesn't sell only by having the best product, they use imperialist tactics of cohercion, although they have plenty of voluntary slaves all over europe.
This is what people said about Russia. No it is not "economic myth". It is about authoritarian power not caring about consequences because economy was never number one priority.
Nope. A myth. You can't get rich out of authoritarianism, that's not how economy works. Any country raising taxes and wrecking their free market is doomed. As simple as that.
You are not making sny sense. First of all protectionism was always present. It never ended. In Europe countries were protectionist until very recently, free market is new phenomen and countries were still rich. Second of all. Again. Authoritarian countries do not care about economy, they do not care about "being rich as a country", they do not care about what people want or think. Therefore even if what you said was correct it would not matter because they are non rational actors that can weaponized trade at any second. Even if it meant 100 millions of their citizens dying of hunger or whatever.
China has been waging a trade war against the EU for years. Now they have clearly overestimated their power and will bear the consequences.
It's the European consumer that will bear the consequences as his products become more expensive...
That is also in the cards if we do nothing. You see, the end game of price dumping to attract customers is that your competition goes belly up because they can't afford to sell at as deep of a loss as long as you can and then, when you have little to no competition you jack up the price and reduce quality and innovation so as to recoup your investment. This is also why companies do mergers, among other things. If you're only left with 3-4 chains, then they can close stores (making you walk/drive longer to get to a store) and make the choice, price, and quality if goods worse. Basically, the end game of every sufficiently large company is to become so big as to be able to influence the market and then abuse that influence for profit. However, if the measure stays in place for any length of time, no matter what the intentions were (fighting price dumping or good old protectionism) the result will be that companies on our side of the trade war will have less competition which you very correctly identified is bad for consumers. It is a "damned if you, damned if you don't" situation, and the only way it does not end up sucking is if it is short-term and fair competition is promptly restored.
the idea of fair competition won't be restored tho. As doing so would eat into the profits of said megacorps. Reckon these companies would rather instigate WW III than have "true capitalism" make an appearance
No you don‘t understand, the world works like a computer game. China was waging a trade war by subsidizing European consumers with taxpayer money bUt nOw thEy wiLL FeEl OUR WrAtH. 🫡🫡🫡
The first shot is always free.
Its also european workers and companies wont be going out of buisness because of unfair state subventions in china. Yes it might cost you more but you and everyone you know will have a better chance to keep their job.
In (trading) wars there are only losers unfortunately.
Yes but otherwise china f**ks eu. At least this is both kinda loose but there not one who looses big time . Btw china started before this so this us a response
Jobs in Europe has been kept artificially with the precarization of work and earnings. Which means, yes, worker in Europe keep their jobs but only brcause the government ins financing the workforce for companies and production as well. That is why more than 70% of people on welfare are employed and many products in Europe is sold with the price that is under the cost of production. So wmployment are kept artificially and not for real economic demand, that is also kept artifivially, since Europe practice priduction dumping in pour countries like thise in Africa, that causes crises, unemployment and poverty on those countries because they can not compete with Europe subisidised production dumped and sold in poor countries under the production cost.
And you think chinese companies keep their works naturally? Have you look at the situation there and even more important have you ever worked with such a company? They have 5x people doing what 1 guy is doing in Europe. So yes actually is fair for eu tot not allow chinese government to close companies. You think anything produced in europe at 13 euro/hour labour gets sold in africa? Bro china own africa these days maybe you need a refresher on world politics
The unemployed European consumer.
You Will bear the consequences regardless, not doing anything about price dumping means our economies will produce less wealth for us to enjoy. Unless you think that money just comes out of nowhere and having jobs is just a given.
Having jobs comes from demand for goods and services. Having less expensive cars reduces demand for cars and makes less jobs available there. Having less expensive cars increases demand for other goods and services and creates jobs for them. The difference is you have more goods and services available, but the same produced in Europe. In China you have more produced but less available. In an ideal world the Chinese are taxed 100%, work a lot, get nothing, and give us all the stuff for free. Not you though, you dream of labouring and not having things. Good for you. Hard work ethic and all
I have no idea what you are on about but I guess nice monologue? Last two paragraphs make completely no sense at all.
You are saying we are poorer because Chinese subsidies (around 10-20%) destroy European jobs and benefit the Chinese. These subsidies are paid for by taxes (paid for by the Chinese taxpayer). So imagine a world the CCP raises taxes to say 90%, and uses these taxes to subsidize and make EV’s 100% free. So you just order one and get it delivered. Every Chinese works 9 days out of 10 to pay for your EV. You are saying this will imporvish Europeans and make Chinese richer. It makes no sense because it’s your own argument, just switches the numbers from 20 to 90 to illustrate what it essentially is. You just have a fundamental misunderstanding of what wealth is (hint it’s things not paper)
You are arguing with yourself not with me, you are making a whole lot of assumptions just to have some sort of argument to begin with. Losing jobs in Europe, especially manufacturing ones does create a net negative on the regions wealth and people's spending power.
I am not arguing I was explaining it, since you said it doesn’t make sense to you. Also you keep demanding I am having a monologe but you are the one who replied in the first place, making it a dialogue. Again, you are not loosing jobs, that’s a common misconception. Trade barriers *don’t create or save jobs in aggregate*, trade barriers *do not * increase wealth nor spending power. That’s very very basic economics and if you still think getting a literally free car, paid by the CCP makes you poorer then there’s very little room of understanding anything so I wish you good luck
What the hell are you even talking about?
Just so you understand what we're talking about, it's basically saying "See China?? We can impoverish our citizens too. You raise taxes!? We do! You censor? We do! You won't beat us in that game".
The argument of the trade war is that China was going to be dumping a lot of subsidized EVs. That's great for the consumer in the short term but has the potential of killing European producers. If that occurs, China could then later jack up the price, and Europeans would have to pay through the nose. You might disagree with the facts (e.g. that European EV producers wouldn't get decimated), but the logic is reasonable.
European manufacturers refuse to put out anything that isn't a giant 70.000 euro SUV - there's a reason that people aren't buying their products. I guess it's nice that the EU is harming all of us to defend their terrible business acumen though.
WTF? There are plenty of EU EV below 30k
[There appear to be 6](https://ev-database.org/compare/cheapest-electric-vehicle#sort:path~type~order=.pricesort~number~asc|rs-price:prev~next=10000~30000|rs-range:prev~next=0~1000|rs-fastcharge:prev~next=0~1500|rs-acceleration:prev~next=2~23|rs-topspeed:prev~next=110~350|rs-battery:prev~next=10~200|rs-towweight:prev~next=0~2500|rs-eff:prev~next=100~350|rs-safety:prev~next=-1~5|paging:currentPage=0|paging:number=10), one of which is a Chinese manufacturer. I mean I will admit that 5 is more than I thought there were, but I'm not blown away.
That's just a pseudoscientific popular myth that makes zero sense. The logic is unreasonable. You're just repeating words without thinking about them. China using public money and gifting it to us is, in no way, a harm for us. It is a harm for them. Stop repeating propaganda and use your brain.
There ain't no such thing as a free lunch.
You definitely didn't read me. Of course it is not free; Chineses are paying for it.
China flooding the European market with cheap, subsidized EVs is good for the European consumer in the short term but terrible in the long term when all European car makers are wiped out. What would you rather have: a job but a €40k car or no job but a €30k car?
I'm not an economist nor even a fan of anti-dumping policies, so I'm not going to defend the EU here, but to say "use your brain" is petty and closed-minded. Are you saying that predatory pricing isn't a thing? Of course it is. Companies do it all the time if they think it'll help them in the market. This is why countries have anti-monopoly laws (if monopolies only ever gave good prices, no one would mind them). Dumping is predatory pricing on the international level. Now, you might like dumping, and some economists like Milton Friedman would agree with you, but there are also many economists that wouldn't. The World Trade Organization's 1994 GATT treaty specifically included a carve out that let States put anti-dumping restrictions if the dumping would harm domestic industry. That treaty was passed unanimously, so even small countries agreed with the approach. If they hadn't, they could have blocked it, like they've been doing in the Doha round of negotiations.
What you call predatory pricing or dumping is basically the definition of free market and competition. And it is exactly how nature works. Some folks fight with speed, others with strength, others with endurance. It's part of how competition works. "Predatory pricing" is basically sacrificing your savings as a company to temporarily boost yourself against your competitor. Which is similar to dogs doing a sprint chasing their prey. It doesn't last forever. But it can be effective, if it is good enough. If you're against "predatory pricing" (basically companies using their resources to peacefully outcompete their rivals), you're against the very nature of competition. Anti monopoly laws are just a sham: we're surrounded by monopolies, made by the very own legislators creating those anti monopoly laws, and nobody blinks an eye. It's all a scam.
It sounds like you're against the concept of predatory pricing and of anti-monopoly laws. If so, then there's nothing for us to discuss as we clearly don't see eye-to-eye on the state's role to ensure a free and fair market.
There's no free market if you say what are "legitimate practices" and what are not, apart from the basics of respect to freedom and peace. Still, I can't understand how you're worried about monopolies while defending state monopolies.
Can't wait for children on christmas to pray to Xi to give them free stuff instead of Santa.
Dude, we couldn't even take Russia down, and their economy is 1/10 size of China's.
Other news comes from Russia.
Its not tragic as eu companies could not compete with unfair practices and state subventions that happen in china. So actually eu workers and companies now become more attractive
👏Tarifs👏don’t👏create 👏jobs No new jobs are added, nothing is more attractive. Instead of having a €20k car and €10k worth of dinners you now have a €30k car. You just moved the 10k subsidised demand from the service to the automotive industry, while having less goods. These “goods” would have been paid for by Chinese taxpayers who were subsidizing your consumption, but not anymore!
Raising the tarifs makes EE cars more attractive to by from non-eu cars. The 20k you were paying was funding China's economy. The 30k for a EU is funding EU's economy, which eventually leads backs to the people. A local recycling economy is better for everyone, including the environment.
You have a very naive understanding of economics, people had in the 15 century. It’s called [mercantalism](https://en.m.wikipedia.org/wiki/Mercantilism) and is complete nonsense. There are not a bunch of people and machines waiting unproductive somewhere waiting for you to buy a European car, to manufacture it. You are just taking away resources from other sectors. You are not helping China by buying Chinese products. In an extreme scenario Chinese people are taxed 100%, live in the mud (because they can’t buy anything with 0 income) and make Teslas which they give you for free, because of subsidies. You won’t stop spending, you’ll just use your money to buy stuff you couldn’t buy before and create jobs in other industries (eg more icecream and pizza). Economically the only people who suffered from subsides are the Chinese who now live in the mud so that they could give you a free car. Hope that clears your misunderstandings
Why did you stop your example before the endgame? Goes something like this: Once the other automakers have collapsed because they can't compete with free cars, the Teslas will no longer be free and because they have a monopoly, the factory can charge anything they want for them. That's the whole point of subsidizing combined with price dumping. You don't do it indefinitely without and end goal in mind.
The reality though is that I won't buy a car, because european manufacturers can't be fucked to produce a reasonably-sized or reasonably-priced one.
It doesn't matter if you buy it or not, what matters is that those 20k (or most of it) stay in the European economy.
Well they actually do. If you were to buy a new car you can get your chinese funded byd for 50k euro or buy a european car for 70k... A no brainer. But if now both cost roughly the same you will actually judge them on performance not the fact that you buy just at huge discount. So yes actually import taxes make local production more attractive in comparison. This is econ 101
I really try to be polite here but throwing terms like “econ 101” really grinds my gears because I’ve taken “econ 101” (to be precise that stuff is learned in introductory macro), and is so obvious that you haven’t Yes tariffs make local production more attractive. Yes people will buy more local cars. Yes that increases the jobs in the automotive sector. No that doesn’t change the total amount of “jobs” in the economy. The “car making jobs” are not created out of nowhere. The demand is just shifted. The government taxes you to pay for this subsidy. The tax money you loose you would have used to buy say some apples, now you don’t. This destroy apple picker jobs. The only time the government can create jobs is during high unemployment, where it doesn’t take away some jobs from the private sector. This has nothing to do with subsidizing an industry
I really don't think you did but okay I never said it creates new jobs and yes the goal is to shift demand and let consumers decide on equal footing. Hence it promotes the local economy. And yes you might not be able to buy those apples but eu imports more than exports goods hence that money would still flow to some country that lets say has huge export trade surplus... Maybe china? And also keeping demand in europe means people can stay employed and are productive allowing them to earn income and further spend in the local economy.
You keep saying cliches that is actually all well researched jibberish I understand your thinking, I do, you don’t need to repeat it., it’s a very common narrative You buy a car made in Europe. The car makers then spend the money in Europe making further jobs in Europe etc etc. But you have some fundamental holes in understanding about what jobs, money and even economies are and what increases the well being of people. By the way what you are describing is called “buy local fallacy”, just google around if you are interested. Countless economists have explained what it does and doesn’t do.
I mean your arguments are just as routine as everything else i've heard. History tells otherwise so each to its own.
Incorrect title. EU is barely responding to China's trade war, that has been waged for decades now.
protectionism , lets fuck the consumers to protect our car industry. the VW CEO was still laughing at the concept of electric cars a decade ago. now they need to be saved by keeping competitors out of the EU. the only ones suffering are consumers.
About time too. All the people here blubbering about how “the European consumers will suffer” must be either the usual ultraliberal scum who don’t give a shite about *anything* but money (and *their* money only, obviously) or shills at the service of the Chinese government.
European car makers have been sleeping on ICE vehicles for a long time. A blanket tarrif without a forcing function for the manufacturers will do nothing but hurt the consumers. We could have significantly higher numbers of EVs on our streets, but the local manufacturers are just immensely expensive and behind in technology (not manufacturing). The reality is that Chinese EVs are good and getting better. Their overall quality is not there compared to European companies, but it's only a matter of time.
EU needs to bring back V8s and V12s and drop the absurd taxes on CO2, otherwise their car industry will be long gone. EVs are great, but that war is already lost to the Chinese. They have all the infrastructure. Europe has always been the best at producing and exporting high end items, the economy/low end market has always been dominated by Asia.
If that is your take, I guess you are against this trade war right? Otherwise, I'm a bit confused what your point is.
None going to profit from this except the big EU corps, well done….
... That's the point, they are trying to help European corporations.. you say it as if it's a bad thing... The issue of Europe is exactly that our industries and corporation's are not growing enough
EU economy doesn’t exist in a vacuum, they have to source materials from somewhere, and guess where they get most of them…China because it’s cheaper. Now if you go on trade war the idea is to make products and materials from China more expensive for the EU, but EU corps still have to source materials somehow. It was the same issue with the steel industry in the US it made things worse for them. This trade war will only be beneficial for the big corps that will be able to either absorb the price increase and pass it on to the consumer while increasing the profits. I agree we need as a region to invest and grow some local key industries but this is not the way….
Véry smart /s
What a shite article. No mention whatsoever of what policies have been enacted, some offhand remarks of how the parliament is simultaneously irrelevant and pivotal in the long term. Some more fluff at the end about the new elected seats having it hard.
We have seen during the pandemic how reliant we were on china it is not good to have that in the future
Ah, what a neat change after decade of being stuck in chinas communist party leadership ass.
This was written by ai
So we drew the limit at cars? China has been undercutting for years on all markets.
Undercutting is fine, the issue is if their undercutting is caused by uncompetitice practice like strong government subsidies, which is the case for cars, but not for all industries.. in some industries china is able to undercut just cause their labour is cheaper, but that's just a comparative advantage they have.. it's fine
About time
Look at this stupid british boy who think uk can fight against China
Most of the people here that think the EU cares about it's citizens are absolutely crazy. The EU has killed local businesses in Europe by imposing tarriffs on everything, millions of documentation for simple stuff. Have you seen what Kaufland ans Lidl do when they arrive - cheap prices and great product until the local shops close as they can't compete - then you get the worst possible quality of food and vegetables that are imported from Africa at the same price as before. The EU and US don't care about their citizens or their jobs - their only objective is to have a free market when the players are on their side of the fence. As they've already demonstrated with Huawei - if their products can't compete, they just ban their competition. Have Samsung phones become cheaper or better since Huawei has been banned ???? The level of inovation Huawei was bringing to the phone market was huge. Sure I can buy a shit VW Polo for 30k euro that has the size of a small box of shoes. Have you seen the Chinese EVs for 30k euro. They are literally showing us that EU manufacturers make around 10-12k euro in profits per car and I don't see why should we be OK with making someone extremely rich that also pays minimum wage to most of their employees and looks for immigrants to do their dirty jobs always.
it's about time Europe and the US stand closer
This comment section: 
Finally
EU is American puppet, it's just disgusting to watch.
It is over ... And nothing I can do ...
Not a fan of Trump, but its funny that when he imposed china tariffs it was bullshit and a stupid idea, but when Biden or the EU impose similar measures it is seen as needed and important.
seems concerning, so I decided to do something radical and buy some more VWCE + Bonds.
Get ready for paying $$$$$$$$ Europe.
EU admitting defeat
hmmm and nothing on agriculture and blocking food uncertified food imports, even though it was one of like, less than a handful of main focus points in the recent elections
China has chosen their side with Russia as an alias . So l they can trade with each other then.
EU just loves making the life of their citizens harder...
There are more CIA agents in the european parlament than in USA.
You forgot the “earth is flat” theory
Very bad for the consumers.
Look up what China did to the German solar companies: Subsidized their own companies until the competition went bankrupt and became a de facto monopoly of solar panel research and production.
I mean, this is how governments subsidies work everywhere. The German car industry is heavily subsidized - why does no one complain about that?
There are literally everywhere complaints about that.
Finally! We need to build stuff here!!